Understanding the Wal-Mart Shopper

Apr 30, 2004
Al McClain

By Al McClain

Exactly who is the Wal-Mart shopper?

The easy answer might be everybody, but Todd Hale, SVP – Consumer Insights, ACNielsen, gave a more specific profile, largely based on Nielsen Homescan information, at the recent
Consumer 360 Conference.

Here are some highlights from the highly detailed presentation (my comments in italics):

  • In the U.S. Wal-Mart is shopped by 84% of households, compared with 58% for Kmart, and 56% for Target

  • Wal-Mart is Fortune’s ‘most admired company,’ for the second year in a row – ironic with all the bad P.R. they get

  • Wal-Mart Supercenters will outnumber its discount stores sometime this year.

  • A Supercenter focus is driving Wal-Mart’s success in the U.S., via higher shopper penetration, increased shopping frequency, and larger basket rings

  • Wal-Mart has 1.4 MM employees versus 1.3 MM for the U.S. Military

  • Annual turnover is 44%

  • They’ll be adding 160,000 new positions in 2004

  • Wal-Mart saves consumers an estimated $ 20 B annually

  • Wal-Mart drives up to 25% of the market’s productivity gains

  • Regular Wal-Mart shoppers are still making lots of trips to supermarkets, although heavier Wal-Mart shoppers naturally spend less in other stores

  • The dollar channel is the only one seemingly immune to Wal-Mart, as they are convenient, low-priced, and provide for a quick trip — immune that is, until Wal-Mart makes
    a competitive move

  • Convenience and location are especially important to non Wal-Mart shoppers — these are two of just a handful of factors that tilt in competitors’ favor, indicating having
    an outstanding real estate department is critical

  • Wal-Mart’s growth is beginning to tilt towards improved frequency and loyalty, versus just new stores

  • Opportunities for Wal-Mart competitors exist in perishable variety, specialty grocery, and special niches — because Wal-Mart is mainstream oriented

  • Among Wal-Mart top shoppers, largest negative category trip categories (more trips to competitors than Wal-Mart) include: bread and baked goods, milk, carbonated beverages,
    tobacco, fresh produce, snacks, packaged meats, condiments/gravies, cheese, candy — largest gaps are in high frequency and immediately consumable categories, indicating big
    box shopping isn’t always convenient

  • Largest positive trip gap categories include medications, disposable diapers, hair care, oral hygiene, vitamins, skin care, diet aids, pet care, stationery and school supplies,
    and automotive

  • The future for Wal-Mart: Aggressive expansion, especially with Supercenters; extra services including gas, rental cars, Kid Connection, Wal-Mart TV Network (in-store), and
    financial services. Plus, better fashion focus; Neighborhood Market expansion; testing of Kicks Café coffee and ‘Dollar Store’ boutiques.

Moderator’s Comment: Assuming Wal-Mart continues to grow and expand at a rapid pace, how can other retailers succeed,
and how should suppliers balance their desire to sell more to Wal-Mart with the need to keep the playing field competitive?

As the population ages, it seems to me there is a tremendous opportunity for retailers to focus on location, cleanliness, and convenience, as those things
are of paramount importance to the aging consumer. Only thing is, price seemingly trumps everything.

Al McClain – Moderator

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1 Comment on "Understanding the Wal-Mart Shopper"

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Tony Orlando
16 years 8 days ago
I’ve studied Wal-Mart supercenters for over 3 years, and the results are simple. Wal-Mart has the perception of the lowest prices, but in reality, they have some weaknesses. The meat dept. is a disgrace, and the deli and produce offer little in terms of savings or homemade goods. You cannot beat them on groceries and HBA-GM, so forget trying to do so. I am a single-store owner in a small town with 10,000 sq. ft. of selling space, and a new supercenter is opening 5 miles away in April. I already run an EDLP pricing concept, so the customers that do shop here feel assured they won’t get gouged. I plan on an interesting campaign when they do open. Wal-Mart sells a select/no roll beef injected with salt & water, along with enhanced solutions in their pork & chicken program as well. There are no meat cutters to be found, and I intend to use this as a way of differentiating myself from them. We handle choice and Angus choice at prices already below Wal-Mart’s… Read more »